Adjustable Interim RAND Licences with ICC Arbitration Can Satisfy a SEP Owner’s RAND Obligation, Justifying a Permanent Stay of Implementer-Led RAND Proceedings

Case: Acer Incorporated & Anor v Nokia Technologies OY / ASUSTEK Computer Inc & Anor v Nokia Technologies OY
Citation: [2026] EWCA Civ 564
Court: England and Wales Court of Appeal (Civil Division)
Date: 12 May 2026
Judges: Arnold LJ (lead), Zacaroli LJ, Peter Jackson LJ

1. Introduction

This appeal sits within the continuing body of English appellate authority on standard-essential patents (“SEPs”) and licensing on reasonable and non-discriminatory terms (“RAND” here, rather than “FRAND”, because the relevant standards were promulgated by the ITU-T). Nokia owned (or could license) a portfolio of SEPs declared essential to the ITU-T H.264/AVC and H.265/HEVC codec standards (the “Nokia Codec SEP Portfolio”). Acer and ASUS, as implementers of the standards in personal computer devices, accepted they required a licence, and the parties agreed any licence should be global; the dispute was primarily over price and the mechanism for determining final RAND terms.

After Nokia began infringement proceedings in multiple foreign jurisdictions (Germany, the UPC, the USA, Brazil and India), Acer and ASUS commenced Patents Court proceedings seeking (i) relief concerning three UK patents (validity/essentiality/non-infringement) and (ii) declarations and determinations aimed at fixing global RAND terms, including “interim licence declarations”. Each implementer gave an unconditional undertaking to enter into any licence determined to be RAND (interim or final).

Nokia challenged jurisdiction over the RAND claims and, crucially, made “Adjustable Licence Offers”: immediate interim global licences whose payments/terms would be adjusted once an arbitral tribunal (Nokia proposed ICC arbitration) determined final RAND terms. The appeal raised a “novel and important question” about the effect of such an offer on (a) whether the court should stay implementer-led RAND proceedings as a matter of case management and (b) whether interim licence declarations should be granted.

2. Summary of the Judgment

2.1 Jurisdiction: upheld, but on a narrower basis

  • The Court of Appeal dismissed Nokia’s jurisdiction appeal. The RAND claims could properly be served out because they fell within Gateway 11 (claims relating wholly or principally to property within the jurisdiction), notwithstanding the global nature of the licence sought.
  • The Court held the claims did not fall within Gateway 16A (negative declarations) because the implementers had not pleaded any UK infringement threat supporting a declaration of non-liability based on a RAND defence.
  • The Court held the claims did not fall within Gateway 4A (additional claims arising out of the same or closely connected facts) because the UK patent validity/essentiality/non-infringement issues were not closely connected factually to Nokia’s RAND obligation.

2.2 Case management stay: granted (effectively dispositive of the RAND claims)

  • The Court held Nokia’s “Adjustable Licence Offers” were offers of licences on objectively RAND terms, capable of immediate acceptance.
  • Because Nokia had made such a RAND offer, Nokia had complied with its RAND obligation.
  • If the implementers refused the offers, they would be refusing RAND terms and therefore could not maintain implementer-led proceedings seeking the English court to determine RAND terms (the implementer-led jurisdiction depends on being a willing licensee).
  • Accordingly, the RAND claims had no real prospect of success and a permanent case management stay should be imposed (with proposed conditions to reduce wasted costs if arbitration proceeded).

2.3 Interim licence declarations: discharged

Given the stay, the interim licence declarations made below had to be discharged, and the Court did not need to determine whether they were correct on the assumption the proceedings continued.

3. Analysis

3.1 The new principle emerging

The decision establishes that, at least on the facts presented, a SEP owner can satisfy its RAND obligation by offering an immediate interim licence whose final financial/contractual position is adjustable by reference to a later arbitral determination of final RAND terms (here, ICC arbitration), and that the implementer’s refusal of such an offer may render it an unwilling licensee for the purposes of maintaining implementer-led RAND proceedings in England. The consequence is that the court may grant a permanent case management stay because there is “no serious issue to be tried” (i.e., no real prospect of success).

3.2 Precedents cited and how they influenced the Court

(a) Foundations: the English approach to global (F)RAND determination

  • Lenovo Group Ltd v Telefonaktiebolaget LM Ericsson (Publ) [2025] EWCA Civ 182, [2025] RPC 11 and Samsung Electronics Co Ltd v ZTE Corp [2025] EWCA Civ 1383, [2026] Bus LR 465 were treated as the authoritative recent summaries of (i) the background principles governing (F)RAND determinations and (ii) the specific principles governing interim licence declarations. Arnold LJ expressly assumed familiarity with these frameworks, signalling that the present decision is an incremental development within an established structure rather than a reinvention of it.
  • Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2020] UKSC 37, [2020] Bus LR 2422 underpinned Nokia’s “choice architecture” argument: it can be legitimate to force an implementer to choose between accepting global RAND terms and facing exclusionary relief for UK infringement. The Court of Appeal adapted that logic to the implementer-led context by holding the implementers could be required to choose between (i) accepting a RAND offer featuring arbitration and (ii) losing the ability to press the English court to set RAND terms at their behest.
  • Nokia Technologies Oy v OnePlus Technology (Shenzhen) Co., Ltd [2022] EWCA Civ 947, [2024] FSR 11 was cited (via an analogy in Tesla Inc v InterDigital Patent Holdings Inc [2025] EWCA Civ 192, [2025] RPC 12) as illustrating that UK involvement can be small in market terms yet sufficient to justify UK adjudication where UK patent rights are engaged. While that was in an infringement posture, it supported the conceptual separation between the territorial patent right and the global licensing obligation attached to it.

(b) Service out and “property within the jurisdiction”

  • Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804 and Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, [2018] 1 WLR 3683 supplied the standard service-out framework: serious issue, gateway, and forum; and the “good arguable case” standard.
  • Vestel Elektronik Sanayi Ve Ticaret AS v Access Advance LLC [2021] EWCA Civ 440, [2021] 4 WLR 60 and Tesla Inc v InterDigital Patent Holdings Inc [2025] EWCA Civ 192, [2025] RPC 12 framed the debate on Gateway 11. The Court reaffirmed Tesla: although the contractual claim seeks a global licence, it “relates wholly” to UK SEPs because it concerns the contractual obligations attaching to UK patent property (distinguishing the territorial patent right from the global obligation burdening it).
  • Amazon.com Inc v InterDigital VC Holdings Inc [2025] EWHC 3334 (Pat) (Meade J) was used to justify why UK patents are a “non-trivial” connecting factor: patentees choose to hold UK patents and thereby submit to UK adjudication as to “scope and effect” of those monopolies.
  • In re Harrods (Buenos Aires) Ltd [1992] Ch 72 was invoked to show that the availability of a particular remedy (here, potential specific performance under the ITU-T/Swiss law analysis) does not alter the correct characterisation of the dispute for gateway purposes.

(c) Gateways 16A and 4A: limits on bootstrapping RAND claims

  • The Court rejected a broad attempt to use alleged foreign enforcement as an implied UK threat, relying on: Attorney General for Canada v Ritchie [1919] AC 999 and K.S. Paul Ltd v Southern Instruments Ltd [1964] RPC 118, emphasising that fear of being sued is not the same as a threat to sue.
  • The Court respectfully disagreed with an obiter suggestion in Vestel Elektronik Sanayi Ve Ticaret AS v Access Advance LLC [2021] EWCA Civ 440, [2021] 4 WLR 60 that a negative declaration limited to non-liability to an injunction might suffice in this context; it held the implementers could not “circumvent” the absence of a UK threat by pleading a declaration that Nokia would not be entitled to an injunction if it sued.
  • On Gateway 4A, the Court took a strict approach to “same or closely connected facts”: patent validity/essentiality/non-infringement issues did not share the requisite factual nexus with the contractual RAND licensing dispute.

(d) Arbitration, consent, and objective RAND compliance

  • Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp [EU:C:2015:817] was relied upon to confirm that (F)RAND disputes can, by agreement, be determined by an independent third party. The Court used this to normalise arbitration as an acceptable mechanism in principle.
  • Alcatel Lucent SAS v Amazon Digital UK Ltd [2025] EWCA Civ 43, [2025] RPC 6 supported the conceptual legitimacy of interim “hold the ring” licences whose payments are adjustable after final RAND is set; this was important because Nokia’s offer was framed as an immediate interim licence rather than a promise to license later.
  • Samsung Electronics Co Ltd v ZTE Corp [2025] EWCA Civ 1383, [2026] Bus LR 465 was cited for the proposition that a SEP owner may choose the forum it considers best suits its interests, reinforcing the Court’s acceptance of “inherent asymmetry” in SEP disputes.
  • Dicey, Morris and Collins, The Conflict of Laws (16thed) at 12-018 was cited to confirm that the court’s stay power extends to arbitration contexts.

3.3 Legal reasoning (step-by-step)

(a) Characterisation: what was the RAND obligation and how is it satisfied?

Accepting the (unappealed) Swiss law analysis, the Court treated the ITU-T declarations as creating a contract between Nokia and the ITU-T for the benefit of implementers, enforceable by them. The key functional proposition was this: Nokia complies with its RAND obligation by offering a licence on terms that are objectively RAND and capable of acceptance.

(b) What Nokia actually offered: licence now, adjustment later

The Court reframed the first-instance characterisation. It held Nokia did not merely offer “to enter into arbitration”; it offered an immediate global interim licence, with a defined mechanism by which any difference between interim and final RAND would be corrected by adjustment following arbitration.

(c) The core move: arbitration without prior consent can still be “RAND” where there is a genuine choice

The implementers’ central objection was the consensual nature of arbitration: absent an arbitration clause in the ITU-T framework and absent ad hoc consent, they said the arbitration-adjustment mechanism could not be “RAND”. The Court accepted the general proposition that courts should not rewrite SDO policies, but concluded Nokia’s offer did not “compel” arbitration in the relevant sense. Instead, the implementers had a choice:

  • Accept a licence whose final terms would be set by an independent arbitral tribunal (a mechanism the Court found unobjectionable on these facts); or
  • Refuse—thereby refusing RAND terms offered by the SEP owner.

Because a willing licensee must be willing to take a licence on RAND terms (and because if multiple RAND outcomes exist, the SEP owner may select the set most favourable to it), the implementers could not insist on their preferred RAND-determining forum (the English court) once Nokia had made an objectively RAND offer featuring arbitration.

(d) Procedural consequence: case management stay as a functional summary disposal

Nokia sought a “case management stay”, but the Court treated the application as substantively akin to summary judgment: if the Adjustable Licence Offer was RAND and capable of acceptance, the implementers’ RAND claims had no real prospect of success. The Court found no procedural unfairness in adopting that analysis on the facts.

(e) Conditioning the stay to reduce wasted costs

Recognising the proceedings were already advanced, the Court proposed conditions aimed at cost-efficiency and continuity if arbitration occurred (pleadings, disclosure and evidence to carry over; costs to become arbitration costs), with permission for written submissions because the conditions had not been argued.

3.4 Impact

(a) Strategic leverage: a SEP owner’s arbitration-adjustable offer as a jurisdictional “off-ramp”

The most immediate impact is tactical: a SEP owner sued in England by an implementer seeking a court-set global RAND rate may neutralise that pathway by making an arbitration-adjustable interim licence offer that the court considers objectively RAND. If refused, the implementer risks being labelled an unwilling licensee and losing the ability to maintain implementer-led RAND proceedings.

(b) Arbitration’s role strengthened, despite “consensual” orthodoxy

While not creating a general duty to arbitrate, the judgment strengthens arbitration’s practical pull by allowing a SEP owner to structure an offer such that refusal has severe procedural consequences. This may promote greater use of arbitration in global SEP disputes, particularly where enforcement under the New York Convention is valued.

(c) “Inherent asymmetry” acknowledged and tolerated

The Court explicitly accepted asymmetry: SEP owners can forum-shop and select the most favourable RAND terms if multiple are available, and may decide in one dispute to arbitrate while in another to litigate (as illustrated by Nokia’s different stance in the Warner Bros/Paramount litigation). This signals limited appetite for judicial “rebalancing” beyond preventing hold-up and hold-out.

(d) Jurisdictional clarity: Gateway 11 remains the workhorse; Gateways 16A and 4A constrained

For service out in implementer-led licensing claims, Gateway 11 is reaffirmed as the principal route where UK patents are engaged, even if the remedy sought is a global licence. Attempts to bootstrap jurisdiction via negative declarations (Gateway 16A) without a pleaded UK threat, or by anchoring to patent validity/non-infringement claims (Gateway 4A), will face a strict evidential and pleading standard.

4. Complex Concepts Simplified

  • SEP (Standard-Essential Patent): a patent that must be used to comply with a technical standard (here, video decoding standards). Implementers cannot practically make standard-compliant products without using the patented technology.
  • RAND / FRAND: a commitment by a SEP owner to license on “reasonable” terms and without “discrimination” between similarly situated licensees. “F” adds “fair”; the Court treated the difference as immaterial here.
  • Interim licence declaration: a court declaration about what a “holding” licence should look like while final RAND terms are being decided, to “hold the ring” and avoid market exclusion during the dispute.
  • Adjustable interim licence: an interim licence where payments/terms are corrected later (up or down) once final RAND is decided, so neither side is unfairly prejudiced in the meantime.
  • Arbitration and consent: arbitration normally requires agreement. This judgment treats “consent” pragmatically: if a SEP owner offers objectively RAND terms that include arbitration, the implementer is not compelled, but refusal may have consequences (loss of implementer-led court relief).
  • Case management stay: a court order pausing (here, effectively ending) proceedings for case management reasons. In this decision it functioned like a summary disposal because the claims were held to have no real prospect of success once a compliant RAND offer was made.
  • Service-out gateways (CPR PD6B): procedural “routes” that allow proceedings to be served on a foreign defendant. The Court emphasised:
    • Gateway 11: claims relating principally to UK property (UK patents).
    • Gateway 16A: negative declarations, but typically needing a plausible threatened claim.
    • Gateway 4A: additional claims closely connected to an anchor claim already properly brought.

5. Conclusion

[2026] EWCA Civ 564 is a significant development in the procedural and practical management of SEP/RAND disputes in England. The Court of Appeal upheld jurisdiction for implementer-led RAND claims via Gateway 11, but—more importantly—held that a SEP owner may satisfy its RAND obligation by offering an immediate interim licence whose final terms are adjustable by ICC arbitration. Refusal of such an objectively RAND offer can render the implementer an unwilling licensee for these purposes, justifying a permanent case management stay of the implementer-led RAND proceedings and the discharge of interim licence declarations.

The judgment therefore shifts practical leverage toward SEP owners who can craft arbitration-adjustable offers, while simultaneously clarifying the limits of service-out gateways relied upon to bring foreign SEP owners before the English court in implementer-led global licensing disputes.